The main thing to remember about your bankruptcy is that the process primarily exists to give a fresh start – being bankrupt is not about being punished, and the process won’t last too long.
The point at which your remaining debts eventually get cancelled is the point when you receive a discharge from the process.
That will happen after different durations, depending on your specific circumstances.
Most people who enter bankruptcy for the first time will get discharged after nine months.
There are some situations which might cause your bankruptcy to run longer than that, however.
We’re going to look at those factors now, so if you’ve been wondering, how long will I be bankrupt in Canada? –stick around.
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Surplus Income and Longer Bankruptcy
Surplus income is one of the factors that can cause your bankruptcy to drag on for a while.
The government in Canada sets a limit on surplus income, and if you exceed this by a certain amount, you’ll likely face a longer wait to get discharged.
Generally, if your monthly income is more than $200 over that limit, you’ll be affected.
You’ll also be required to pay some of the surplus into your bankruptcy.
While there isn’t a law against, or anything wrong with having surplus income during bankruptcy, it will have a significant effect on the date of your discharge.
If you’re a first time bankrupt with surplus income that exceeds the threshold imposed by the government, expect to wait at least twenty-one months for discharge – as opposed to the minimum nine-month period.
Not Your First Bankruptcy Equals Longer Bankruptcy
The nine-month minimum discharge also won’t apply to you if you’ve been through the bankruptcy process before.
If that’s the case for you, expect at least a twenty-four-month wait for discharge.
That’s the best-case scenario for a second time bankrupt – however, if you also have a surplus income that exceeds the government limit, you’ll wait longer still.
That amounts to a minimum of thirty-six-months.
Your Discharge Will be Delayed if it’s Opposed
Opposition to discharge from bankruptcy would come from your creditors, the trustee, or even the Superintendent of Bankruptcy – but, such an event is rare, and the circumstances need to be pretty serious for it to happen.
On the main part, this sort of occurrence is due to a bankrupt person being dishonest with either creditors or the trustee.
It can also arise if you don’t complete your required duties as a bankrupt person.
Any opposition to your discharge would either get resolved through mediation or go to court.
In most cases, however, you’ll get discharged in a timely manner that suits your circumstances – as long as you’re not earning excessively more than you need to support yourself and your dependents.
Failure to Complete Your Required Duties as a Bankrupt Person Means a Longer Wait Until Discharge
When you enter into the bankruptcy process, your licensed insolvency trustee will guide you through what’s required of you.
A licensed insolvency trustee is the only person authorized in Canada to file on your behalf for bankruptcy.
It’s vitally important you complete all the duties expected of you during the process, as failure to do so will result in a delay to your discharge.
Depending on the nature of the departure, that wait can turn out to be considerable – and discharge won’t happen until you’ve addressed any issues and completed the duties required.
It’s always important to act on the advice of your trustee.
At BankruptcyCanada, we can put you in touch with a local licensed insolvency trustee who will give you the best advice about keeping your wait for discharge as short as possible.
If you have any questions or would just like to discuss your options further, give us a call today on (877) 879-4770 (24/7).
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